Canadian Property Prices, Sales Rebound

The Canadian Real Estate Association reports that residential real estate sales and prices are finally turning around after a drop following the announcement of new mortgage rules in August. CREA analysts noted that sales were up in 60% of markets surveyed and its MLS Home Price Index showed a 3.9% gain in price trends for the year ending in September. According to the index, areas enjoying the most increases include Regina (14.2%), Calgary (6.5%), Greater Toronto (5.7%) and Greater Montreal (2.2%). For more on this continue reading the following article from Property Wire.

Residential real estate sales picked up in 60% of local markets in Canada last month as the sector bedded down with changes to the country’s mortgage rules.

Prices also increased slightly but overall the market is subdued compared with a year ago, according to the latest data from the Canadian Real Estate Association (CREA).

The number of sales rose 2.5% month on month, the first monthly gain since March. CREA said it helps to partially offset the 6.2% drop recorded in August when the new mortgage rules were introduced.

Sales activity increased in Greater Vancouver, Calgary, Edmonton, Greater Toronto, and Quebec City. Calgary and Quebec City were the only two large markets where new listings eased in September, with declines of less than 2%.
Actual, not seasonally adjusted, activity however, remains down 15.1 % from the same time last year with more than half of all local markets posting declines of at least 10%.

The actual, not seasonally adjusted, national average price for homes sold in September 2012 was $355,777, up 1.1% from the same month last year.

The national average price continues to be influenced by compositional factors, most notably by fewer sales in Greater Vancouver this year compared to much stronger levels last year. The result has been a downwardly skewed national average price this year compared to an upwardly skewed average selling price last year.

Excluding Greater Vancouver, which currently accounts for less than 5%, of national activity, from the national average price calculation yields a year on year increase of 3.4%, reflecting average sale prices that rose in 70% of all local markets in September 2012.

However, CREA’s MLS Home Price Index, which is regarded as providing the best gauge of Canadian home price trends, rose 3.9% year on year in September, the fifth time in as many months that the year on year gain shrank, and marks the slowest rate of increase since May 2011.

Year on year price gains decelerated for all benchmark property types tracked by the index. The increase was strongest for one storey single family homes, up 5.7% and two storey single family homes up 5%. Prices for townhouse and apartment units continue to post more modest gains, rising 1.1% and 1.5% respectively.

The index rose fastest in Regina, up 14.2% year on year, which was the only market covered by the index in which price growth accelerated. It also climbed in Calgary by 6.5%, in Greater Toronto by 5.7%, in Greater Montreal by 2.2%, and the Fraser Valley by 2.1%. In Greater Vancouver it posted a 0.8% year on year decline in September.